Defunding the IRS is like cutting police resources during a crime wave | Opinion
thedailyjournal.com -- Friday, August 15, 2025, 6:43:27 AM Eastern Daylight Time
Categories: Federal Legislation & Congress, Supreme Court & Judicial Appointments, Tax Policy & Reform
IRS says it will no longer penalize houses of worship for endorsing political candidates during religious services, as long as it's framed as part of religious expression.
President Donald Trump's proposed 2026 budget calls for slashing the IRS budget to $9.8 billion, its lowest funding level since 2002. That includes a drastic 33% cut to enforcement, a move that's both shortsighted and damaging.
A bill advanced July 21 by the House Appropriations Financial Services and General Government Subcommittee would go even further by reducing the IRS budget to $9.5 billion.
The Trump administration's Department of Government Efficiency has indicated that it is targeting waste, fraud and abuse in the federal government and those having interactions with government agencies -- in some cases, Social Security recipients. There is no doubt there is waste within the IRS, as there is throughout the federal government. The Trump administration's efforts, however, to defund the IRS especially in the area of enforcement will exacerbate fraud and abuse in the federal tax system, which runs counter to DOGE objectives. Defunding the agency tasked with making sure everyone pays their taxes will only embolden cheaters and worsen the very fraud the administration claims it wants to stop.
Less IRS enforcement means less revenue
The IRS enforcement reduction will clearly exacerbate a considerable problem created by the so-called One Big Beautiful Bill signed into law this summer, which will result in ballooning the federal deficit through tax cuts. Less IRS enforcement will certainly mean less revenue collected.
This proposed slashing of funding is on top of the significant prior and likely future claw-back of the special $80 billion that Congress had enacted a few years ago that was supposed to address a plethora of IRS needs including antiquated computer systems and inadequate resources to audit wealthy individuals, large corporations and complex partnerships. That funding had enabled the Service to, among other things, hire experienced personnel with the technical skills to adequately determine whether the tax returns from taxpayers in these sectors were proper. This defunding is also completely contradictory with a prior Congress's strategy to reduce taxpayer noncompliance by providing the IRS with the necessary resources.
The IRS proposed drastic reduction of IRS financing is complemented with a sharp decrease in personnel, just under a 20% decrease, including the loss of many experienced auditors. There is also an exodus of knowledgeable top leadership within the IRS -- including the forced resignation of commissioner Danny Werfel before his term had expired. His replacement, former U.S. Rep. Billy Long, didn't have any experience running a large, complex organization. Furthermore, his prior involvement with the federal tax system was very limited but included promoting employee retention tax credit claims, an area with significant fraud and abuse. He lasted two months and was recently removed.
Instead of naming a full-time acting commissioner, Trump appointed Secretary of the Treasury Scott Bessent to serve as acting commissioner until a permanent replacement is named. Bessent certainly has enough on his plate running the treasury department and this position clearly requires a full-time leader with the requisite skills and experience.
This turmoil was compounded by the very recent placing of both Holly Paz, commissioner of the IRS Large Business and International Division, and Elizabeth Kastenberg, acting director of the IRS Office of Professional Responsibility, on administrative leave. Defunding the IRS and decapitating its leadership is certainly not the way to address the needs of an organization tasked with collecting the revenue to fund government operations.
There is a sizeable tax gap existing in the federal income tax system, which represents the difference between what taxpayers legally owe for a given tax year and the amount that is actually paid. This was conservatively estimated a few years ago to exceed $600 billion per year. Without adequate enforcement, that gap will only grow.
National taxpayer advocate Erin Collins, in her midyear report to Congress released June 25, also warned of the enormous harm to the federal income tax system that can be caused by the proposed IRS funding cuts and the decimated workforce. Instead of taking steps to address this dilemma by properly resourcing the IRS, the proposed sizeable decrease to its budget coupled with the loss of key personnel with technical and institutional knowledge and professional leadership will serve to aggravate this quandary.
Fewer audits will allow taxpayers to game the system
With the reduced threat of meaningful audits, more taxpayers will be encouraged to take aggressive tax positions on tax returns or even ignore tax rules in their entirety. The federal tax system will further spiral into a race-to-the-bottom quagmire, where the tax burden falls on those who play by the rules. Law-abiding taxpayers will continue to shoulder the burden while others game the system with impunity.
In his recent article in Tax Notes Federal, retired Cravath tax partner Michael Schler lamented that "the state of the federal income tax system is poor, and that the situation is the worst it's been for at least the 50 years I've been practicing tax law." This tour de force addressed a number of reasons for this unfortunate state of affairs, including the difficulties in enacting "good" federal tax legislation and the questionable relatively recent Supreme Court decision, Loper Bright Enterprises v. Raimondo, which effectively serves to limit the scope of federal agency regulations interpreting a statute including Treasury regulations addressing Internal Revenue Code income tax provisions.
Schler's article also focused on the subject of this opinion piece: the IRS' problem with tax enforcement due in part to inadequate financing. This is something that can and should be addressed. The current steps being taken to effectively weaken IRS enforcement make as much sense as cutting police department personnel and funding during a crime wave. Gutting the tax police during a tax compliance crisis is like slashing police budgets during a crime wave.
This is not just about budgets or bureaucracy -- it's also about fairness. If the government can't make a reasonable effort to try to make sure everyone pays what they owe, those who either ignore the rules and/or have the resources and savvy to aggressively circumvent the law will win. Everyone else and this country as a whole will lose.
Philip G. Cohen is a professor of taxation at Pace University Lubin School of Business and a retired vice president-tax and general tax counsel at Unilever United States.
Sign Our PetitionThe recent proposal to defund the Internal Revenue Service (IRS) by significantly slashing its budget is emblematic of a broader ideological struggle over the role of government in ensuring equity and fairness in society. It is critical to understand that this move is not merely a fiscal decision; it is a deliberate attempt to undermine a key institution responsible for enforcing tax laws and collecting revenue that supports essential public services. The implications of this defunding are dire and resonate with historical patterns of resistance to progressive taxation and governmental accountability, where the wealthy often evade their fair share of taxes, further exacerbating income inequality.
Historically, the IRS has played a pivotal role in maintaining the integrity of the tax system, particularly in holding powerful individuals and corporations accountable. The proposed cuts, which would reduce the IRS budget to its lowest level since 2002, are juxtaposed against a backdrop of increasing wealth concentration in the hands of a small elite. The idea that the IRS should be defunded during a time of rising federal deficits, in conjunction with tax cuts for the wealthy, illustrates a profound disconnect from social responsibility. This strategic defunding mirrors historical attempts to dismantle mechanisms of social equity, such as the New Deal reforms, which sought to provide a safety net and promote economic justice for all citizens.
The argument presented in the article highlights a critical point: reduced IRS enforcement is likely to lead to an increase in tax evasion and fraud. By slashing enforcement budgets, the government is effectively signaling to the wealthy and large corporations that there will be less oversight and accountability for their tax obligations. This mirrors the historical realities of previous tax cuts, where the benefits disproportionately favored the affluent while leaving working-class individuals and families to shoulder a heavier burden. By eroding the IRS's capacity to audit and enforce tax compliance, we risk widening the gap between the rich and poor, a phenomenon that has been documented in various studies showing that income inequality negatively impacts social cohesion and economic stability.
Moreover, the proposed cuts to the IRS are intertwined with a broader narrative of governmental distrust and anti-regulatory sentiment that has gained traction in recent decades. This sentiment often manifests as a call for reduced government intervention in the economy, under the guise of promoting individual freedom. However, this rhetoric conveniently overlooks the historical reality that government regulation has often been essential for protecting the public interest, particularly in areas like environmental protection, consumer rights, and tax fairness. By defunding the IRS, the current administration is not merely reducing government size; it is dismantling the very mechanisms that ensure accountability and transparency within the tax system, thereby further entrenching the power of the wealthy elite.
Another critical aspect of this situation is the political maneuvering behind these budget cuts. The Trump administration's initiative to defund the IRS coincides with efforts to promote a tax philosophy that favors the wealthy, often framed as a means of stimulating economic growth. However, historical data consistently shows that tax cuts for the wealthy do not translate into widespread economic benefits for the average citizen. Instead, they lead to greater wealth accumulation at the top, resulting in reduced funding for essential services that support the most vulnerable populations. This pattern of prioritizing the interests of the wealthy over the needs of the broader population illustrates a troubling trend in American politics, where the voices of marginalized communities are often sidelined in favor of elite interests.
In conclusion, the proposed budget cuts to the IRS reflect a dangerous continuation of policies that prioritize the wealthy at the expense of the broader public good. As advocates for social justice and equity, it is essential to articulate the historical context and social implications of these actions. By drawing connections to the ongoing struggles for economic justice, we can mobilize grassroots support to challenge these regressive policies. The fight for a fair tax system, one that holds everyone accountable regardless of their financial standing, is not merely a political issue; it is a moral imperative that requires collective action to ensure a just and equitable society for all.
The recent commentary on the proposed drastic cuts to the IRS budget highlights a critical issue in the ongoing struggle over the fiscal and moral responsibilities of government. As we examine the implications of defunding the IRS, it becomes clear that this move is akin to undermining the very systems that ensure accountability and fairness within our economic framework. Historically, the IRS has played a pivotal role in enforcing tax laws that are essential for maintaining public services and infrastructure, funding programs that benefit society as a whole. By slashing the agency's budget and resources, the government is not only diminishing its capacity to enforce tax compliance but is also paving the way for greater inequality and erosion of public trust in governmental institutions.
The proposal to cut the IRS budget to its lowest levels in decades presents a troubling paradox. While the administration claims to target waste, fraud, and abuse within the federal government, it is paradoxically dismantling the very mechanisms designed to prevent such abuses in the tax system. A well-functioning IRS is crucial for ensuring that all citizens and corporations meet their tax obligations. When the agency is underfunded, as it has been since the early 2000s, compliance rates drop, and the wealthy and large corporations—who frequently exploit loopholes and evade taxes—are disproportionately favored. This situation creates a system where the burden of taxation falls unevenly on working-class Americans, further exacerbating socioeconomic disparities. Thus, the administration's push to defund the IRS is not merely a fiscal adjustment; it is a direct attack on the principle of equitable taxation.
Inaction in the face of these proposed cuts would not only harm federal revenue but could also lead to an increase in the federal deficit. The lack of enforcement will embolden tax evaders, further eroding the tax base necessary to fund essential services such as healthcare, education, and infrastructure. The irony is palpable: the administration advocates for tax cuts that disproportionately benefit the wealthy while simultaneously crippling the IRS's ability to collect revenue needed for public services. As advocates for a more equitable fiscal policy, it is essential to highlight this contradiction and demand accountability from policymakers. We must press for a restoration of IRS funding to ensure that tax compliance is enforced and that all Americans contribute their fair share to the nation's coffers.
Moreover, the proposed cuts are especially damaging in the context of a broader effort to undermine public trust in government institutions. The forced resignation of experienced IRS leadership and the appointment of individuals with limited relevant experience signals a deliberate attempt to weaken the agency from within. This trend not only hampers its operational efficacy but also sends a message that expertise and accountability are less valued than political loyalty. To counter this narrative, we must advocate for the appointment of qualified individuals to leadership positions within the IRS and push for transparency and accountability in the agency's operations. By doing so, we can restore faith in the government's ability to serve the public interest and ensure that the tax system is fair and just.
As engaged citizens, we have a responsibility to challenge these regressive policies. We can mobilize our communities to advocate for a fully funded IRS that can effectively enforce tax compliance and reduce inequality. This involves contacting our representatives, participating in town hall meetings, and utilizing social media platforms to raise awareness about the significance of a robust IRS. By sharing data and real-life stories that illustrate how tax cuts for the wealthy and defunding the IRS hurt the average American, we can build a compelling narrative that resonates with a broader audience. Our collective action can serve as a counterbalance to the current political climate, fostering a renewed commitment to an equitable tax system that benefits everyone.
In conclusion, the conversation surrounding IRS funding should not be seen as a mere budgetary issue but as a fundamental question of fairness, accountability, and the social contract between the government and its citizens. We must recognize the historical significance of the IRS in promoting a fair tax system and ensure that it is adequately funded to fulfill its essential role. By advocating for the restoration of IRS resources and demanding transparency and accountability within the agency, we can work towards a more equitable society that holds all individuals and corporations accountable to their tax obligations. It is time to stand firm against regressive cuts and push for a government that prioritizes the well-being of all its citizens.
The proposed cuts to IRS funding and the ongoing changes to enforcement practices have significant implications for the overall fairness and integrity of our tax system. Here are several actionable steps that individuals can take to respond to this situation effectively:
### 1. **Educate Yourself and Others** - **Action:** Stay informed about the implications of IRS funding cuts. - **Example:** Organize or participate in community discussions or workshops about the importance of fair tax enforcement and the potential consequences of funding reductions.
### 2. **Advocate for Fair Tax Policies** - **Action:** Write letters to your congressional representatives voicing your concerns about IRS funding cuts. - **Who to Write To:** - **Senator Elizabeth Warren** - Email: senator_warren@warren.senate.gov - Mailing Address: 2400 JFK Federal Building, 15 New Sudbury Street, Boston, MA 02203 - **Representative Alexandria Ocasio-Cortez** - Email: ocasiocortez.house.gov/contact - Mailing Address: 1513 Longworth House Office Building, Washington, D.C. 20515 - **What to Say:** Express your belief that adequately funding the IRS is essential for maintaining tax compliance and ensuring that the wealthiest individuals and corporations pay their fair share. Mention the importance of resources for auditing and enforcement in combating tax fraud.
### 3. **Support Relevant Petitions** - **Action:** Sign and share petitions that call for adequate IRS funding and fair tax policies. - **Example Petition:** Change.org often has relevant petitions. Search for "IRS funding" or "fair tax enforcement" to find current petitions. - **What to Say:** Encourage others to join the movement for fair tax policy by sharing the petition on social media and with community groups.
### 4. **Engage with Local Organizations** - **Action:** Partner with local advocacy groups focused on tax justice and government accountability. - **Example:** Organizations like the **Institute on Taxation and Economic Policy (ITEP)** and **Americans for Tax Fairness** often have campaigns and resources available for community members. - **Contact Information:** - ITEP: info@itep.org | 202-299-1066 - Americans for Tax Fairness: info@americansfortaxfairness.org | 202-505-2500
### 5. **Participate in Public Comment Opportunities** - **Action:** Monitor federal agency announcements for public comment periods regarding budget proposals. - **Example:** Submit comments when the IRS or the Treasury Department opens public comment on their budget proposals.
### 6. **Utilize Social Media** - **Action:** Use platforms to raise awareness about the importance of funding the IRS. - **Example:** Create posts that highlight how cuts to the IRS could exacerbate tax inequality, using relevant hashtags like #FairTax or #IRSFunding. - **What to Say:** Share facts about the effects of IRS funding cuts on everyday taxpayers and the importance of tax compliance.
### 7. **Contact Local Media Outlets** - **Action:** Write letters to the editor of local newspapers regarding the importance of IRS funding. - **What to Say:** Emphasize how these cuts could lead to increased tax evasion by wealthy individuals and corporations, ultimately shifting the tax burden to middle and lower-income families.
### 8. **Engage in Grassroots Mobilization** - **Action:** Organize or join rallies and events focused on government accountability and tax justice. - **Example:** Check platforms like Eventbrite or local community boards for events related to tax reform or IRS funding.
### Conclusion By taking these actions, individuals can contribute to a larger movement aimed at preserving the integrity of the tax system and ensuring equitable enforcement of tax laws. Raising your voice, mobilizing your community, and advocating for fair tax policies can help counter the detrimental effects of proposed IRS funding cuts.